The Money Paradigm

The secret to money is simple – use it, Money only ‘works’ when it is in circulation, but there is ore than one way to circulate it. The first and majority ‘use case’ for money is to facilitate exchange, buying and selling of goods and services. If you are ‘employed’ you get paid for your services rendered and the amount will depend on your knowledge skills and experience, sometimes the amount you produce and sometimes for the time you are ‘on duty’. If you run a business very much the same applies but it’s more flexible as to how much you can ‘take home’, how much ‘profit’ you make.

The second use case for money is ‘investment’ or making money ‘work’ for you. By this I mean lending ‘your’ money to or more accurately buying shares in a company, which is what it says it is, purchasing and owning a ‘piece’ of a company. You become a ‘shareholder’ and are entitled to receive a ‘dividend’ or a share of the profits of the company – assuming of course they do make a profit. Don’t by the way confuse this with ‘trading’ in shares or anything else, we’ll come to that.

The third use case is to purchase ‘assets’. Sometimes because you need them, like a house or a car, sometimes because you want them, like a horse or a yacht, sometimes because you believe they will appreciate in value, like a work of art (unlike some assets which tend to depreciate in value). Robert Kiyosaki, author of ‘Rich Dad, Poor Dad’ and possibly one of the best authors on money as a subject explains how many ‘assets’ are actually liabilities costing more to keep and maintain over time than the value they will raise on sale. Some assets are also unpredictable like precious metals which can rise and fall quite drastically in value and are also prone to theft like works of art, unless stored securely which of course incurs a cost. There is another type of asset which is ‘different and to which we will come later.

The final use case for money, if it really is a use case is for trading or gambling. The latter speaks for itself but trading is about buying and selling shares or currencies when their relative prices are low and selling when they are high, or buying in one place, or market, and selling in another for the same reason. Most traders whether it’s on the ‘stock market’, foreign exchange or anything else usually end up losing because they make the wrong choices and decisions at the wrong moment.

I cannot give you ‘financial advice’ but my policy has always been only to hang on to enough money to keep me going with my regular ‘cost of living’ and lifestyle purchases for a couple of months. If you take the right attitude to money, the Universe will ensure it always turns up when needed as it has done for me for over 50 years.